MPs question record of city firm in helping jobless
a4eBS Emma Harrison, boss at A4e at the premises at Queens House, Queens Street, Sheffield
THE performance of a Sheffield-based company in helping unemployed people to get back to work was questioned by MPs, who asked why it should be awarded new Government contracts.
Details of an £8.6m dividend received by Emma Harrison, A4e’s chair, emerged as the Commons public accounts committee scrutinised the firm’s record. The payout was made despite A4e missing a target of getting 30% of people enrolled on a previous Government training scheme into work.
Committee chair Margaret Hodge, asked civil servants why welfare-to-work companies with a poor track record of fulfilling previous contracts had been given new work. She said A4e’s performance on Pathways to Work was “abysmal”.
Fellow committee member, Conservative MP Richard Bacon, said that the company got 9% of clients into work in the Pathways to Work programme, when it had been expected to deliver 30%.
A4E’s UK turnover last year was estimated at between £160m and £180m, derived from Government contracts, and of the £11m paid in dividends to the company’s five shareholders, 87% went to Mrs Harrison.
The company’s chief executive officer Andrew Dutton told MPs: “We have a small group of shareholders. The dividends that we pay to the shareholders reflect the personal risk that they have. Having owned a company for over 21 years, at times they have had to effectively put their own homes and mortgages on the line.”
Some of the company’s profits were ploughed back into the business.
In a statement, A4e said that although it had missed its targets, the figure was actually 24.2%, and its performance was better than the industry average. Mrs Harrison’s dividend was described as being in line with that of a successful entrepreneur who invested and took risks.
The businesswoman, who lives in Thornbridge Hall, near Great Longstone, founded Action for Employment, which later became A4e, to help redundant steelworkers after the collapse of the industry in Sheffield. The company now operates around the world.
Mrs Harrison’s efforts to encourage enterprise and help the long-term jobless get back to work were hailed last December as an inspiration by Prime Minister David Cameron, who gave her the job of helping problem families into work.
Sheffield South East MP Clive Betts MP is urging the Government to review the way it carries out its programme for helping people to find work.
He said the focus should be on the whole system, which currently favours big national companies. “It is geared to payments by results, which means companies have to have a healthy cash balance before they can tender, and small and medium-sized businesses are excluded from the process.”
Local expertise was being lost, and some charities, such as those with knowledge of helping the homeless and disabled people, could not contribute.
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